Senator seeks input on cryptocurrency legislation

A key Senate Republican is seeking public input on how best to craft legislation that aims to support cryptocurrency and blockchain technologies while protecting investors.

Sen. Pat Toomey, R-Pa., ranking member on the Senate Banking Committee, plans to use the feedback and propose a bill that "clarifies ambiguity around how existing laws, especially in the tax and securities realms, may apply to cryptocurrencies," according to a news release Thursday.

"Rather than trying to ignore or suppress cryptocurrency and related technologies, regulators and legislators alike need to recognize that open, public networks are here to stay," Mr. Toomey said in the news release. "Our laws and regulations must adapt to these developments."

Mr. Toomey is requesting proposals until Sept. 27 on issues such as securities implications of cryptocurrencies, custody regulation, and investor and consumer protections.

Each proposal should include information about how it would encourage the growth of cryptocurrency and blockchain technology in the U.S. and proposed legislative language, the release said.

"Not only might cryptocurrency and blockchain technologies be as revolutionary as the internet, they also have the potential to build wealth and financial independence for individuals who are empowered to engage in financial transactions directly with each other, free from oft-costly middlemen," Mr. Toomey said. "That's why it's important Congress gets this right and ensures the United States remains at the forefront of cryptocurrency and fintech innovation. I am hopeful the broad array of legislative proposals I receive will help in crafting thoughtful legislation."

Securities and Exchange Commission Chairman Gary Gensler is also focused on cryptocurrency regulations, and in an Aug. 3 speech, Mr. Gensler said the SEC needs broader authority from Congress to better protect cryptocurrency investors.

"We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks," Mr. Gensler said. "We also need more resources to protect investors in this growing and volatile sector."